North American Office Highlights 2q 09
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COLLIERS INTERNATIONAL
|
NORTH AMERICA
Highlights OFFICE
|
SECOND QUARTER
|
2009
Office Space Markets Posts Another Weak Quarter Ross J. Moore, Executive Vice President, Market and Economic Research Office leasing markets across North America endured another sluggish quarter with rising vacancy levels and falling rents. With the U.S. economy still contracting and experiencing sizable monthly job losses, many businesses were only interested in shedding space, not taking on more. This was reflected in almost all regions of the U.S. with the vast majority of cities surveyed posting higher vacancy levels. For the sixth consecutive quarter tenants returned more space to the market than they leased, helping to push the national vacancy rate up for the seventh consecutive three-month period.
Q2 2009
Q3 2009*
VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE *Projected, relative to prior period
USA OFFICE MARKET SUMMARY STATISTICS SECOND QUARTER 2009 Vacancy Rate Q2 2009: 15.47% Change from Q1 2009: 0.97% Absorption Q2 2009: –25.1 Million Square Feet
A modest supply of office development also came on the market during the second quarter, again helping to put upward pressure on the national vacancy rate. Rents moved downward as landlords competed for tenants in an attempt to keep occupancies from declining further. This was more apparent in downtown markets but suburban rents also moved lower. While the economy is showing signs of stabilizing, the outlook for the office market is not encouraging with little chance of new hiring until well into 2010. With business conditions still fragile, the office leasing market will remain extremely weak for the balance of 2009 and much of 2010. U.S. office vacancy rate up sharply. The US national office vacancy rate moved substantially higher during the second quarter, marking the seventh consecutive increase. Aided by sublease space increasing by 6.3 million square feet (MSF) to total 86.9 MSF, the overall vacancy rate increased 97 basis points to register 15.47%. Vacancy levels have now returned to Q4 2004 levels. The Downtown vacancy rate increased 84 basis points to register 13.77% while suburban vacancies increased 103 basis points to total 16.27%. Canadian vacancy rates also moved higher with CBD vacancies rising 86 basis points to 4.76% compared with suburban vacancies which increased 90 basis points to 8.08%. Downsizing and consolidation continues with more negative absorption. Second quarter absorption was again negative with occupied space contracting by 25.1 MSF. This was the sixth consecutive quarterly contraction and significantly worse than a year ago when absorption was –1.6 MSF, but broadly in line with Q1, when occupied space fell by 25.3 MSF. Companies are now shedding space at the quickest pace since Q3 2001, when occupied space shrank by 28.0 MSF. Canadian markets also recorded a contraction in occupied space with 221,000 SF returned to the market.
continued on page 7 USA OFFICE MARKET Q2 2008 – Q2 2009
New Construction Q2 2009: 16.3 Million Square Feet
30
16% 15
Under Construction: 65.0 Million Square Feet Asking Rents Per Square Foot (Change from Q1 2009): Downtown Class A: $41.15 (-5.1%) Suburban Class A: $27.37 (-1.2%)
Million Square Feet
20
14 10
12
-10 -20 -30
Tenant Inducements Per Square Foot (Months of Free Rent): Downtown Class A: $29.19 (4.4)
13
0
Vacancy (%)
MARKET INDICATORS
Q2 2008
Q3 2008
Absorption
Q4 2008
Q1 2009
Completions
Q2 2009 Vacancy
www.colliers.com Copyright © 2009 Colliers International. Colliers International is a worldwide affiliation of independently owned and operated companies.
COLLIERS INTERNATIONAL
1
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia, SC Columbus, OH Dallas/Fort Worth, TX Denver, CO Detroit, MI Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC West Palm Beach/Palm Beach County, FL USA TOTAL/AVERAGE
2
DOWNTOWN OFFICE
ALL INVENTORY
EXISTING NEW UNDER VACANCY INVENTORY (SF) SUPPLY CONSTRUCTION RATE (%) JUNE 30, 2009 Q2 2009 (SF) (SF) MARCH 31, 2009 56,086,000 2,931,000 19,503,000 3,470,000 57,797,000 2,064,000 18,648,000 130,117,000 12,707,000 29,917,000 4,631,000 9,673,000 35,581,000 26,628,000 29,747,000 3,206,000 9,066,000 3,133,000 10,096,000 8,064,000 37,933,000 11,559,000 12,878,000 11,288,000 3,356,000 5,169,000 31,493,000 10,089,000 8,458,000 15,568,000 10,620,000 25,621,000 7,513,000 89,744,000 257,412,000 98,339,000 17,023,000 11,581,000 41,918,000 19,946,000 22,370,000 34,041,000 3,726,000 1,326,000 19,165,000 10,101,000 82,895,000 7,593,000 57,783,000 11,401,000 8,476,000 9,355,000 115,753,000 9,501,000 1,594,058,000
COLLIERS INTERNATIONAL
541,000 0 0 0 206,000 0 390,000 0 0 0 171,000 195,000 0 0 0 0 0 55,000 0 0 0 0 0 (14,000) 0 0 0 140,000 0 0 0 0 0 0 0 0 110,000 0 0 0 0 23,000 13,000 0 434,000 0 0 318,000 492,000 0 0 0 1,593,000 0 4,667,000
719,000 0 803,000 0 1,464,000 0 2,427,000 2,303,000 825,000 0 190,000 0 0 496,000 0 0 0 0 0 0 1,817,000 0 0 0 0 0 0 0 0 1,973,000 0 0 520,000 4,600,000 1,438,000 315,000 62,000 12,000 0 1,045,000 0 578,000 0 0 0 40,000 418,000 0 4,227,000 0 30,000 0 6,928,000 0 33,231,000
13.3 6.6 17.7 9.9 11.5 8.0 4.2 14.6 17.4 16.2 13.5 15.1 20.7 15.1 16.4 10.7 11.5 24.3 16.2 11.0 13.0 14.8 10.9 21.5 10.3 14.0 15.0 7.8 12.7 14.5 18.6 17.2 17.5 10.2 12.4 13.1 11.0 15.2 10.1 14.6 19.3 7.6 8.8 21.8 7.7 15.1 13.2 20.5 9.3 21.3 18.2 14.1 8.3 18.1 12.93
VACANCY RATE (%) JUNE 30, 2009 14.2 7.8 19.0 10.6 12.8 9.4 6.7 15.2 17.4 16.3 14.7 15.3 21.2 14.4 16.5 10.5 11.5 24.1 18.8 10.9 13.1 15.5 10.9 22.0 10.7 11.4 14.8 8.2 13.2 15.7 19.1 17.8 19.1 10.6 13.7 13.8 12.3 15.9 10.6 16.8 19.9 7.9 10.8 21.8 9.2 15.0 14.1 24.4 11.3 21.5 18.8 14.6 9.6 17.2 13.77
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
(26,000) (29,000) (251,000) (25,000) (581,000) (29,000) (97,000) (824,000) 0 (51,000) (77,000) (82,000) (148,000) (22,000) (83,000) 7,000 3,000 (6,000) (256,000) (39,000) (61,000) (83,000) 0 (68,000) (13,000) 107,000 127,000 83,000 (43,000) (198,000) (47,000) (242,000) (120,000) (346,000) (3,174,000) (747,000) (93,000) (75,000) (241,000) (418,000) (959,000) (75,000) (34,000) 8,000 113,000 15,000 (689,000) (20,000) (679,000) (24,000) (24,000) (52,000) (231,000) 86,000 (10,828,000)
28,000 (38,000) (53,000) (39,000) (1,160,000) (57,000) (301,000) (2,018,000) (3,000) (126,000) (122,000) (118,000) (12,000) (289,000) (140,000) 35,000 (11,000) (6,000) (461,000) (89,000) (229,000) (66,000) (13,000) (61,000) (96,000) 131,000 44,000 51,000 (93,000) (247,000) (239,000) (240,000) (170,000) (348,000) (6,771,000) (2,394,000) (140,000) (204,000) (545,000) (579,000) (1,790,000) (162,000) (60,000) (3,000) 219,000 36,000 (1,242,000) (184,000) (1,326,000) 10,000 (57,000) (116,000) (57,000) 69,000 (21,253,000)
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia, SC Columbus, OH Dallas/Fort Worth, TX Denver, CO Detroit, MI Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC West Palm Beach/Palm Beach County, FL USA TOTAL/AVERAGE
DOWNTOWN OFFICE
EXISTING VACANCY VACANCY INVENTORY (SF) RATE (%) RATE (%) JUNE 30, 2009 MARCH 31, 2009 JUNE 30, 2009 30,963,000 670,000 9,236,000 2,038,000 39,558,000 1,031,000 13,350,000 71,075,000 5,869,000 8,932,000 1,896,000 4,308,000 22,524,000 17,342,000 11,619,000 1,039,000 4,504,000 1,838,000 6,337,000 4,700,000 27,838,000 6,504,000 6,602,000 6,115,000 700,000 2,384,000 14,789,000 2,997,000 1,901,000 7,941,000 5,319,000 13,240,000 3,943,000 55,574,000 162,881,000 14,176,000 10,198,000 5,681,000 30,860,000 9,550,000 13,039,000 14,629,000 2,732,000 548,000 8,653,000 6,977,000 49,687,000 3,365,000 28,967,000 6,843,000 8,476,000 5,642,000 74,506,000 3,002,000 875,089,000
17.3 5.0 16.5 4.6 10.0 5.9 3.4 14.1 14.3 13.5 9.5 13.8 21.6 14.6 13.5 12.5 16.7 17.7 15.5 11.3 8.5 17.8 13.3 17.8 10.5 7.8 13.5 8.8 23.7 11.0 12.0 12.5 18.0 7.5 12.1 7.8 7.1 18.1 9.6 13.4 18.6 5.9 7.2 16.7 5.6 16.3 12.1 25.1 10.8 21.1 18.1 14.5 8.9 23.4 12.09
18.4 7.7 16.4 5.5 12.3 6.4 6.3 15.3 14.5 13.2 13.7 13.3 21.9 14.1 13.0 12.8 17.6 20.3 19.5 11.5 8.4 19.0 13.3 18.6 10.5 10.3 12.1 9.5 23.7 12.6 12.8 13.6 20.4 7.8 13.4 7.9 9.7 18.6 10.2 16.2 18.9 6.1 9.8 16.4 9.7 15.6 12.7 32.8 14.1 21.5 18.8 15.4 8.4 22.0 12.99
CLASS A
AVERAGE ANNUAL YTD ABSORPTION ABSORPTION QUOTED RENT QUARTERLY CHANGE Q2 2009 YTD 2009 (US$ PSF) CHANGE IN IN RENT (SF) (SF) JUNE 30, 2009 RENT (%) (%) 111,000 (16,000) 16,000 (18,000) (347,000) (5,000) (20,000) (849,000) (9,000) 26,000 (80,000) (44,000) (67,000) (70,000) 4,000 (4,000) (42,000) (57,000) (256,000) (9,000) 13,000 (79,000) 0 (45,000) 0 (58,000) 80,000 106,000 0 (122,000) (41,000) (145,000) (92,000) (118,000) (2,109,000) (19,000) (142,000) (29,000) (193,000) (251,000) (402,000) (4,000) (18,000) 1,000 57,000 54,000 (307,000) (18,000) (443,000) (22,000) (24,000) (53,000) 364,000 41,000 (5,752,000)
138,000 (17,000) (71,000) (16,000) (740,000) 0 (177,000) (1,021,000) (13,000) (41,000) (105,000) (49,000) 85,000 (299,000) (22,000) (6,000) 42,000 (57,000) (461,000) (27,000) (118,000) (97,000) 73,000 (69,000) 0 97,000 90,000 102,000 (62,000) (212,000) (11,000) (103,000) (123,000) (39,000) (3,963,000) (300,000) (177,000) (84,000) (507,000) (311,000) (897,000) (7,000) (23,000) (10,000) 150,000 54,000 (706,000) (123,000) (847,000) 12,000 (85,000) (105,000) 122,000 44,000 (10,326,000)
21.90 (3.18) 17.40 0.00 25.00 (0.52) 20.50 (0.97) 50.10 (4.52) 29.00 (3.33) 30.30 (1.30) 35.50 (4.05) 23.50 0.00 21.00 1.85 19.80 (3.18) 23.10 0.39 25.50 (0.97) 28.00 (12.50) 22.60 0.58 25.20 (2.33) 32.00 (0.03) 21.50 (1.73) 23.50 (1.35) 36.50 (2.90) 38.80 (0.23) 20.30 0.00 21.00 0.00 20.20 (0.15) 39.30 0.00 16.40 0.00 39.80 1.84 21.10 1.89 16.90 0.12 43.50 1.83 22.00 0.00 26.50 (4.71) 22.30 (3.00) 48.60 (2.11) 69.70 (6.91) 51.30 (1.99) 34.20 25.55 27.70 (0.75) 25.70 (0.08) 28.80 (5.30) 27.10 (0.88) 25.10 (0.91) 22.70 (2.16) 22.20 (3.14) 34.20 (0.35) 33.50 (1.06) 34.20 (13.40) 37.60 (6.85) 32.10 (6.93) 20.60 0.00 19.60 (2.98) 21.20 (9.23) 49.60 (1.17) 38.40 (3.37) 41.10 (weighted) (5.10) 29.30 (equal) (2.02)
(4.49) 0.00 3.77 2.91 (19.15) 3.57 (5.78) (8.97) (0.34) 5.54 (3.18) 1.05 (1.92) (17.65) 1.30 (4.55) (1.84) (1.73) (1.35) (2.54) 0.96 (1.51) 0.00 0.80 0.00 3.81 6.07 (1.68) (0.06) (1.43) 0.00 (2.28) 8.10 (14.03) (15.17) (13.62) 0.71 (2.30) 0.23 (7.58) (0.88) (1.10) (1.52) (3.14) 0.00 (2.79) (20.63) (7.94) (0.22) 0.00 (5.23) (5.64) (1.08) (4.41) (10.29) (4.36)
COLLIERS INTERNATIONAL
3
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia, SC Columbus, OH Dallas/Fort Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Tampa, FL Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
4
SUBURBAN OFFICE
ALL INVENTORY
EXISTING NEW UNDER VACANCY INVENTORY (SF) SUPPLY CONSTRUCTION RATE (%) JUNE 30, 2009 Q2 2009 (SF) (SF) MARCH 31, 2009 182,350,000 5,923,000 49,265,000 10,221,000 100,555,000 7,986,000 54,699,000 105,710,000 19,422,000 72,489,000 4,886,000 16,589,000 255,685,000 125,453,000 99,291,000 3,593,000 17,698,000 45,366,000 4,433,000 14,322,000 7,642,000 155,815,000 19,879,000 26,339,000 35,938,000 37,610,000 9,739,000 22,913,000 165,777,000 9,221,000 27,409,000 61,693,000 17,809,000 44,146,000 25,107,000 104,024,000 159,001,000 57,371,000 44,229,000 15,877,000 77,207,000 52,278,000 109,064,000 107,493,000 17,837,000 43,289,000 41,071,000 5,399,000 68,900,000 66,855,000 33,478,000 52,671,000 83,673,000 38,754,000 70,959,000 150,397,000 74,101,000 28,677,000 3,365,576,000
COLLIERS INTERNATIONAL
344,000 13,000 654,000 0 427,000 83,000 38,000 0 145,000 35,000 70,000 350,000 561,000 232,000 0 22,000 106,000 95,000 0 0 0 1,293,000 0 0 224,000 143,000 0 0 1,206,000 0 7,000 289,000 0 0 300,000 59,000 283,000 0 0 0 0 459,000 215,000 0 0 327,000 345,000 0 579,000 330,000 161,000 102,000 993,000 391,000 250,000 0 347,000 135,000 11,612,000
2,507,000 48,000 380,000 318,000 544,000 0 249,000 390,000 737,000 223,000 0 337,000 3,210,000 0 197,000 0 11,000 326,000 0 0 0 2,509,000 301,000 0 521,000 324,000 67,000 455,000 1,667,000 0 152,000 1,493,000 0 430,000 84,000 463,000 158,000 975,000 0 0 81,000 815,000 1,261,000 1,348,000 0 61,000 766,000 0 737,000 742,000 0 1,736,000 816,000 1,164,000 267,000 1,542,000 1,245,000 81,000 31,736,000
15.9 10.6 18.2 17.3 17.0 20.0 14.7 21.8 22.6 9.9 17.8 14.7 16.3 2.7 18.7 25.3 13.8 12.9 20.7 19.2 7.8 15.2 21.7 16.0 16.3 23.6 8.1 23.3 17.2 16.6 13.6 12.6 16.4 19.7 11.5 15.3 11.2 17.6 16.9 17.0 19.5 14.7 15.1 20.6 14.4 10.9 19.0 20.9 16.8 18.1 18.4 16.8 10.7 9.5 14.0 10.0 11.5 20.0 15.25
VACANCY RATE (%) JUNE 30, 2009 16.4 10.6 18.4 19.8 19.3 21.5 14.9 23.0 23.0 10.5 22.0 15.5 16.6 14.3 18.4 26.0 13.8 13.8 22.5 18.3 9.3 16.2 22.5 16.0 17.0 24.8 9.4 23.5 15.5 16.8 13.5 14.1 16.5 20.1 13.0 17.2 11.2 18.5 16.4 17.2 20.2 15.8 15.8 22.2 14.9 11.8 21.0 21.0 17.4 18.3 19.9 19.2 11.1 9.3 14.8 10.6 11.6 21.0 16.27
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
(567,000) 62,000 459,000 (255,000) (949,000) (52,000) (105,000) (1,285,000) (61,000) (193,000) (214,000) (75,000) (378,000) 187,000 4,000 (30,000) 92,000 (335,000) (80,000) 131,000 (44,000) (447,000) (164,000) 0 (84,000) (285,000) (107,000) (55,000) (1,077,000) (11,000) 18,000 (768,000) (28,000) (335,000) (113,000) (1,984,000) 206,000 (497,000) 227,000 (10,000) (613,000) (412,000) (547,000) (630,000) (894,000) (90,000) (456,000) (5,000) 19,000 70,000 (408,000) (1,539,000) 387,000 52,000 (652,000) 665,000 148,000 (202,000) (14,305,000)
(935,000) 125,000 (158,000) (348,000) (1,733,000) 46,000 (272,000) (2,158,000) (61,000) (453,000) (214,000) (56,000) 83,000 (371,000) (403,000) (59,000) 29,000 (601,000) (80,000) 2,000 (82,000) (609,000) (239,000) (414,000) (241,000) (555,000) 21,000 (209,000) (3,747,000) 8,000 (6,000) (1,069,000) (17,000) (563,000) (406,000) (1,756,000) 459,000 (1,177,000) (197,000) (70,000) (1,734,000) (640,000) (162,000) (967,000) (1,692,000) (361,000) (827,000) (112,000) (260,000) (173,000) (1,010,000) (2,362,000) 1,007,000 284,000 (1,158,000) 143,000 (276,000) (407,000) (29,188,000)
UNITED STATES OF AMERICA
SUBURBAN OFFICE
MARKET
EXISTING VACANCY VACANCY INVENTORY (SF) RATE (%) RATE (%) JUNE 30, 2009 MARCH 31, 2009 JUNE 30, 2009
Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia, SC Columbus, OH Dallas/Fort Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Tampa, FL Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
77,330,000 2,661,000 21,151,000 4,343,000 29,007,000 3,941,000 18,721,000 44,680,000 12,187,000 12,647,000 996,000 8,980,000 94,236,000 37,396,000 27,552,000 2,157,000 3,764,000 10,770,000 1,812,000 8,136,000 65,967,000 10,005,000 9,410,000 11,068,000 4,895,000 2,945,000 4,936,000 99,024,000 5,388,000 6,918,000 14,253,000 6,225,000 16,730,000 15,808,000 61,439,000 90,175,000 31,271,000 25,108,000 3,582,000 32,256,000 15,456,000 67,050,000 32,975,000 9,802,000 12,394,000 24,969,000 2,916,000 15,165,000 23,653,000 21,757,000 24,882,000 23,644,000 24,045,000 24,141,000 98,511,000 38,733,000 8,868,000 1,408,827,000
16.0 7.2 20.7 18.5 18.2 16.4 20.7 28.8 20.4 10.3 13.5 9.4 15.9 16.5 16.6 27.4 24.1 17.5 14.2 17.5 14.3 22.3 17.1 15.7 34.6 5.6 33.3 13.7 16.1 7.7 17.5 10.5 14.7 10.7 14.9 14.0 20.0 19.3 35.0 21.4 16.5 14.1 25.5 12.0 9.6 16.8 23.7 22.8 23.4 17.9 18.5 9.0 7.8 15.9 13.3 14.9 18.0 16.42
16.2 6.8 20.6 20.3 18.8 17.8 20.4 30.5 21.1 11.0 18.4 9.5 16.4 13.9 16.9 27.8 21.8 18.5 14.2 17.7 16.0 22.6 17.1 16.9 38.6 4.6 37.2 15.0 16.2 8.0 18.8 14.1 16.7 12.6 18.0 13.9 20.8 19.2 43.7 22.5 16.8 14.9 26.3 12.6 11.4 18.8 22.0 23.0 23.0 19.9 22.3 9.7 7.4 17.4 13.6 16.0 19.9 17.26
CLASS A
AVERAGE ANNUAL YTD ABSORPTION ABSORPTION QUOTED RENT QUARTERLY CHANGE Q2 2009 YTD 2009 (US$ PSF) CHANGE IN IN RENT (SF) (SF) JUNE 30, 2009 RENT (%) (%) 101,000 11,000 555,000 (78,000) 175,000 0 (52,000) (753,000) 59,000 (77,000) (54,000) 8,000 (126,000) 201,000 (157,000) (7,000) 87,000 (34,000) 0 (5,000) (147,000) (50,000) 0 (35,000) (55,000) 25,000 (3,000) (530,000) (4,000) (23,000) 8,000 (224,000) (147,000) (64,000) (1,912,000) 341,000 (273,000) 23,000 (139,000) (348,000) 55,000 (332,000) (119,000) (22,000) 8,000 (307,000) 48,000 351,000 312,000 (319,000) (907,000) 585,000 92,000 (400,000) 665,000 (200,000) (72,000) (4,263,000)
105,000 78,000 214,000 (112,000) (162,000) 127,000 (183,000) (1,276,000) 22,000 (28,000) (54,000) 11,000 164,000 162,000 (327,000) (27,000) 81,000 (107,000) 0 (133,000) 483,000 (131,000) (480,000) (41,000) (111,000) 135,000 (64,000) (2,048,000) 37,000 (81,000) (139,000) (139,000) (393,000) (233,000) (1,493,000) 877,000 (735,000) (236,000) (164,000) (761,000) (220,000) 91,000 12,000 17,000 (102,000) (275,000) (19,000) 263,000 309,000 (659,000) (1,261,000) 1,032,000 275,000 (610,000) 1,018,000 (315,000) 202,000 (7,919,000)
22.40 (1.58) 24.00 0.00 26.40 1.46 18.30 0.00 30.10 (0.33) 26.50 0.00 19.90 (0.60) 27.80 (0.68) 21.10 0.19 21.20 0.43 18.00 1.47 19.50 0.88 25.50 (0.97) 22.00 (10.20) 23.30 (1.61) 25.30 0.00 25.80 (2.27) 28.00 0.14 18.60 (1.06) 21.00 (0.29) 27.60 (0.93) 19.50 0.00 21.00 0.00 22.30 (2.07) 35.50 (1.96) 18.30 0.00 27.40 (2.15) 36.10 (2.67) 17.60 0.28 21.70 (0.32) 33.10 (2.62) 21.00 0.00 27.50 (0.90) 21.70 (1.23) 26.40 0.80 28.40 (0.98) 31.80 (5.91) 27.00 (4.09) 31.80 12.77 31.20 (3.29) 23.60 (0.25) 25.00 0.48 26.80 (3.52) 23.20 (3.50) 23.70 (2.71) 22.20 0.05 21.60 (5.26) 25.80 (2.71) 36.40 (1.94) 34.80 (3.33) 38.30 (5.34) 28.00 3.55 25.00 0.00 25.10 1.01 29.70 (0.20) 30.20 1.75 31.00 (1.56) 27.40 (weighted) (1.16) 25.60 (equal) (1.09)
(3.11) 0.00 1.15 (3.43) (6.17) 26.19 (0.50) 15.88 3.07 0.76 1.47 0.41 (1.92) (12.00) (2.06) (0.47) (4.44) (10.77) 0.00 (0.43) (1.04) 1.40 0.00 (1.81) (3.45) 0.00 (4.20) (5.05) (9.40) 1.40 (4.58) (30.81) (1.54) (3.30) (2.69) (2.20) 1.27 (5.10) (0.31) (11.86) (2.03) (0.44) (9.42) (4.46) (3.78) (0.76) (5.26) 2.38 (5.02) (11.31) (7.80) 39.72 (3.85) 3.30 7.41 (0.75) (5.66) (2.56) (2.32)
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CANADA
DOWNTOWN AND SUBURBAN OFFICE
ALL INVENTORY AND CLASS A
DOWNTOWN OFFICE – ALL INVENTORY
MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC Victoria, BC CANADA TOTAL/AVERAGE
34,211,000 10,613,000 4,891,000 1,786,000 49,429,000 14,606,000 3,733,000 1,926,000 84,998,000 24,497,000 4,636,000 235,326,000
NEW SUPPLY Q2 2009 (SF)
0 461,000 0 0 0 0 0 0 26,000 22,000 (5,000) 504,000
UNDER CONSTRUCTION (SF)
5,454,000 578,000 0 169,000 0 360,000 0 127,000 4,571,000 0 243,000 11,502,000
VACANCY RATE (%) MARCH 31, 2009
6.4 0.5 3.8 10.2 4.8 3.1 1.6 4.6 4.2 3.5 – 4.27
VACANCY RATE (%) JUNE 30, 2009
7.8 5.0 3.8 10.0 6.2 2.9 1.6 4.6 4.7 4.5 2.7 5.26
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
(484,000) 463,000 2,000 3,000 (656,000) 28,000 2,000 (1,000) 86,000 (242,000) (19,000) (818,000)
(1,086,000) 375,000 (33,000) 4,000 (888,000) (83,000) 14,000 3,000 411,000 (534,000) (19,000) (1,835,000)
DOWNTOWN OFFICE – CLASS A
MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC Victoria, BC CANADA TOTAL/AVERAGE
20,750,000 8,275,000 1,916,000 571,000 23,076,000 8,641,000 1,026,000 442,000 37,955,000 10,034,000 596,000 113,283,000
VACANCY RATE (%) MARCH 31, 2009
3.6 3.9 1.4 11.4 4.4 3.0 0.6 0.0 4.7 2.1 – 3.90
VACANCY RATE (%) JUNE 30, 2009
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
3.7 3.8 2.8 11.1 6.3 2.6 0.6 0.0 5.7 3.2 3.8 4.76
(72,000) 5,000 (22,000) 1,000 (452,000) 32,000 0 4,000 (30,000) (107,000) (10,000) (651,000)
(354,000) (68,000) (5,000) 0 (463,000) (82,000) (4,000) 4,000 243,000 (180,000) (10,000) (921,000)
AVG. ANNUAL QUOTED RENT (C$ PSF) JUNE 30, 2009
QUARTERLY CHANGE IN RENT (%)
48.00 (14.29) 46.80 (1.91) 31.50 2.18 27.30 0.00 31.10 6.69 48.50 0.00 34.80 0.00 30.00 4.35 53.60 1.29 44.00 0.00 37.00 0.00 45.40 (weighted) (2.19) 39.30 (equal) (1.00)
YTD CHANGE IN RENT (%)
(13.51) 2.77 2.88 12.73 (3.98) 5.30 (0.37) (7.22) 0.00 0.00 (3.46) (4.47)
SUBURBAN OFFICE – ALL INVENTORY
MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montreal, QC Ottawa, ON Regina, SK Toronto, ON Vancouver, BC Victoria, BC CANADA TOTAL/AVERAGE
16,717,000 8,192,000 5,864,000 2,393,000 22,422,000 19,885,000 533,000 95,667,000 27,892,000 3,377,000 202,942,000
NEW SUPPLY Q2 2009 (SF)
390,000 76,000 (20,000) 0 0 0 0 496,000 0 28,000 969,000
UNDER CONSTRUCTION (SF)
1,005,000 173,000 150,000 73,000 0 0 0 1,594,000 870,000 150,000 4,014,000
VACANCY RATE (%) MARCH 31, 2009
9.2 3.1 14.7 7.7 9.7 9.3 1.4 5.8 7.6 – 7.18
VACANCY RATE (%) JUNE 30, 2009
11.0 10.4 14.6 7.5 9.1 9.7 1.4 6.7 8.1 0.8 8.08
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
117,000 (5,000) 21,000 5,000 133,000 (92,000) 0 572,000 (147,000) (5,000) 597,000
40,000 21,000 145,000 128,000 280,000 (26,000) 16,000 64,000 (274,000) (5,000) 389,000
SUBURBAN OFFICE – CLASS A
MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montreal, QC Ottawa, ON Regina, SK Toronto, ON Vancouver, BC Victoria, BC CANADA TOTAL/AVERAGE
6
COLLIERS INTERNATIONAL
7,559,000 4,176,000 2,430,000 993,000 12,027,000 11,645,000 533,000 43,734,000 12,649,000 682,000 96,430,000
VACANCY RATE (%) MARCH 31, 2009
9.1 6.7 23.7 10.5 8.4 10.3 1.4 6.9 10.5 – 8.49
VACANCY RATE (%) JUNE 30, 2009
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
10.3 8.5 19.6 9.4 8.2 11.6 1.4 7.0 11.1 2.8 8.86
265,000 (26,000) 15,000 11,000 21,000 (150,000) 0 683,000 (86,000) (8,000) 724,000
410,000 (26,000) 104,000 107,000 140,000 (200,000) 16,000 741,000 (166,000) (8,000) 1,118,000
AVG. ANNUAL QUOTED RENT (C$ PSF) JUNE 30, 2009
QUARTERLY CHANGE IN RENT (%)
34.80 (0.14) 31.30 (0.06) 27.20 0.15 25.50 0.00 24.90 0.61 30.00 0.10 28.00 0.00 29.80 (0.13) 31.00 (3.13) 33.00 0.00 29.70 (weighted) (0.98) 29.50 (equal) (0.30)
YTD CHANGE IN RENT (%)
(7.33) (2.13) 2.91 (5.20) (9.83) (7.57) 0.00 (0.87) 0.00 0.00 (3.49) (3.11)
NORTH AMERICA
OFFICE INVESTMENT
Office Space Markets Post Another Weak Quarter
UNITED STATES OF AMERICA – OFFICE INVESTMENT
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cleveland, OH Columbus, OH Dallas/Fort Worth, TX Denver, CO Fresno, CA Ft. Lauderdale/Broward County, FL Houston, TX Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA AVERAGE
CBD SALES PRICE (US$ PSF) 180.00 – 200.00 151.00 470.00 250.00 275.00 161.00 115.00 – – 195.00 185.00 – 140.00 115.00 245.00 – 79.00 – 292.00 165.00 225.00 165.00 177.00 – – – – 200.00 350.00 300.00 250.00 – 180.00 130.00 – 314.00 98.00 – 150.00 250.00 – 265.00 – – 150.00 150.00 351.00 395.00 395.00 103.00 217.11
CBD SUBURBAN SUBURBAN CAP RATE SALES PRICE CAP RATE (%) (US$ PSF) (%) 7.40 – 8.50 7.60 – 8.50 8.00 7.50 10.00 – – 9.25 8.50 – 8.00 9.00 9.00 – 9.00 – 4.90 – 8.00 8.50 8.25 – – – – 8.00 7.00 8.00 8.00 – 8.50 8.90 – 9.10 – 9.00 8.00 – 7.50 – – 8.80 8.50 6.95 7.15 7.15 9.40 8.18
135.00 235.00 175.00 151.00 95.00 150.00 120.00 112.00 115.00 158.00 130.00 125.00 203.00 147.00 89.00 135.00 120.00 295.00 128.00 134.00 287.00 155.00 180.00 150.00 97.00 165.00 170.00 250.00 200.00 – – – 200.00 276.00 170.00 131.00 93.00 299.00 158.98 120.00 205.00 204.00 128.00 – 151.00 100.00 – 150.00 – 305.00 241.00 184.00 167.87
8.10 – 9.00 7.60 – 10.00 9.00 8.20 9.50 – 9.00 9.50 8.00 – 9.00 9.00 10.00 7.80 9.00 7.10 6.10 7.75 8.00 8.50 7.25 8.50 8.00 8.00 8.00 – – – 8.00 6.50 9.50 8.90 8.95 6.50 7.50 9.75 8.25 7.50 – – – 10.50 – 9.00 – 8.10 7.90 7.50 8.36
Continued from page 1
Rents (CBD) register third substantial drop. For the third consecutive quarter, downtown lease rates dropped significantly with Q2 Class A asking rents dipping by 5.1% to $41.15 per square foot. Markets such as Manhattan, Boston, Chicago and San Francisco again contributed to the unusually large drop but nonetheless the national trend is clearly down as demonstrated by unweighted rental declines (see unweighted rent on page 3). Suburban asking rents also fell during the quarter, declining by 1.2% to $27.37 per square foot. Year-to-date CBD rents are down 10.3% while suburban rents are down 2.6%. Office rents in Canada also fell with CBD rents declining 2.2% while suburban rents moved 1.0% lower. Office construction up for the quarter but the trend remains down. Second quarter office completions totaled 16.3 MSF, a slight increase from the 15.4 MSF recorded in the first quarter, but a modest decline from the second quarter of 2008 when construction registered 19.4 MSF. Construction activity continued to decline with Q2 under construction activity falling by 18.8 MSF to total 65 MSF. Construction activity is expected to maintain this trend, leaving the development pipeline below levels witnessed in early 2005, when just 40 MSF of office development was underway.
CANADA – OFFICE INVESTMENT
MARKET Calgary, AB KitchenerWaterloo, ON Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC Victoria, BC CANADA AVERAGE
CBD CBD SUBURBAN SUBURBAN SALES PRICE CAP RATE SALES PRICE CAP RATE (C$ PSF) (%) (C$ PSF) (%) 385.00 7.50 275.00 8.00 160.00 275.00 – 139.00 175.00 341.00 500.00 325.00
8.00 7.50 8.00 7.70 8.50 7.00 5.75 6.50
110.00 175.00 130.00 – – 201.00 300.00 290.00
7.75 8.25 8.40 – – 7.80 7.50 6.75
287.50
7.38
211.57
7.78
GLOSSARY Inventory – Includes all existing multi- or single-tenant leased and owneroccupied office properties greater than or equal to 10,000 square feet (net rentable area). In some larger markets this minimum size threshold may vary up to 50,000 square feet. Does not include medical or government buildings. Vacancy Rate – Percentage of total inventory physically vacant as at the survey date including direct vacant and sublease space. Absorption –Net change in physically occupied space over a given period of time. New Supply – Includes completed speculative and build-to-suit construction. New supply quoted on a net basis after any demolitions or conversions. Annual Quoted Rent – Includes all costs associated with occupying a full floor in the mid-rise portion of a Class A building inclusive of taxes, insurance, maintenance, janitorial and utilities (electricity surcharges added where applicable). All office rents in this report are quoted on an annual, gross per square foot basis. Rent calculations do not include sublease space. Cap Rate – (Or going-in cap rate) Capitalization rates in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap rates are calculated by dividing net operating income (NOI) by purchase price. Note: SF = Square Feet; PSF = Per Square Foot; CBD = Central Business District
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
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COLLIERS INTERNATIONAL
HIGHLIGHTS · NORTH AMERICA
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OFFICE · SECOND QUARTER 2009
$1.6 Billion (€1.1 Billion) in Global Revenue 1. 1 Billion SF (102 Million SM) Under Management 12,700 Employees
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NORTH AMERICA
Highlights OFFICE
|
SECOND QUARTER
|
2009
Office Space Markets Posts Another Weak Quarter Ross J. Moore, Executive Vice President, Market and Economic Research Office leasing markets across North America endured another sluggish quarter with rising vacancy levels and falling rents. With the U.S. economy still contracting and experiencing sizable monthly job losses, many businesses were only interested in shedding space, not taking on more. This was reflected in almost all regions of the U.S. with the vast majority of cities surveyed posting higher vacancy levels. For the sixth consecutive quarter tenants returned more space to the market than they leased, helping to push the national vacancy rate up for the seventh consecutive three-month period.
Q2 2009
Q3 2009*
VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE *Projected, relative to prior period
USA OFFICE MARKET SUMMARY STATISTICS SECOND QUARTER 2009 Vacancy Rate Q2 2009: 15.47% Change from Q1 2009: 0.97% Absorption Q2 2009: –25.1 Million Square Feet
A modest supply of office development also came on the market during the second quarter, again helping to put upward pressure on the national vacancy rate. Rents moved downward as landlords competed for tenants in an attempt to keep occupancies from declining further. This was more apparent in downtown markets but suburban rents also moved lower. While the economy is showing signs of stabilizing, the outlook for the office market is not encouraging with little chance of new hiring until well into 2010. With business conditions still fragile, the office leasing market will remain extremely weak for the balance of 2009 and much of 2010. U.S. office vacancy rate up sharply. The US national office vacancy rate moved substantially higher during the second quarter, marking the seventh consecutive increase. Aided by sublease space increasing by 6.3 million square feet (MSF) to total 86.9 MSF, the overall vacancy rate increased 97 basis points to register 15.47%. Vacancy levels have now returned to Q4 2004 levels. The Downtown vacancy rate increased 84 basis points to register 13.77% while suburban vacancies increased 103 basis points to total 16.27%. Canadian vacancy rates also moved higher with CBD vacancies rising 86 basis points to 4.76% compared with suburban vacancies which increased 90 basis points to 8.08%. Downsizing and consolidation continues with more negative absorption. Second quarter absorption was again negative with occupied space contracting by 25.1 MSF. This was the sixth consecutive quarterly contraction and significantly worse than a year ago when absorption was –1.6 MSF, but broadly in line with Q1, when occupied space fell by 25.3 MSF. Companies are now shedding space at the quickest pace since Q3 2001, when occupied space shrank by 28.0 MSF. Canadian markets also recorded a contraction in occupied space with 221,000 SF returned to the market.
continued on page 7 USA OFFICE MARKET Q2 2008 – Q2 2009
New Construction Q2 2009: 16.3 Million Square Feet
30
16% 15
Under Construction: 65.0 Million Square Feet Asking Rents Per Square Foot (Change from Q1 2009): Downtown Class A: $41.15 (-5.1%) Suburban Class A: $27.37 (-1.2%)
Million Square Feet
20
14 10
12
-10 -20 -30
Tenant Inducements Per Square Foot (Months of Free Rent): Downtown Class A: $29.19 (4.4)
13
0
Vacancy (%)
MARKET INDICATORS
Q2 2008
Q3 2008
Absorption
Q4 2008
Q1 2009
Completions
Q2 2009 Vacancy
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UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia, SC Columbus, OH Dallas/Fort Worth, TX Denver, CO Detroit, MI Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC West Palm Beach/Palm Beach County, FL USA TOTAL/AVERAGE
2
DOWNTOWN OFFICE
ALL INVENTORY
EXISTING NEW UNDER VACANCY INVENTORY (SF) SUPPLY CONSTRUCTION RATE (%) JUNE 30, 2009 Q2 2009 (SF) (SF) MARCH 31, 2009 56,086,000 2,931,000 19,503,000 3,470,000 57,797,000 2,064,000 18,648,000 130,117,000 12,707,000 29,917,000 4,631,000 9,673,000 35,581,000 26,628,000 29,747,000 3,206,000 9,066,000 3,133,000 10,096,000 8,064,000 37,933,000 11,559,000 12,878,000 11,288,000 3,356,000 5,169,000 31,493,000 10,089,000 8,458,000 15,568,000 10,620,000 25,621,000 7,513,000 89,744,000 257,412,000 98,339,000 17,023,000 11,581,000 41,918,000 19,946,000 22,370,000 34,041,000 3,726,000 1,326,000 19,165,000 10,101,000 82,895,000 7,593,000 57,783,000 11,401,000 8,476,000 9,355,000 115,753,000 9,501,000 1,594,058,000
COLLIERS INTERNATIONAL
541,000 0 0 0 206,000 0 390,000 0 0 0 171,000 195,000 0 0 0 0 0 55,000 0 0 0 0 0 (14,000) 0 0 0 140,000 0 0 0 0 0 0 0 0 110,000 0 0 0 0 23,000 13,000 0 434,000 0 0 318,000 492,000 0 0 0 1,593,000 0 4,667,000
719,000 0 803,000 0 1,464,000 0 2,427,000 2,303,000 825,000 0 190,000 0 0 496,000 0 0 0 0 0 0 1,817,000 0 0 0 0 0 0 0 0 1,973,000 0 0 520,000 4,600,000 1,438,000 315,000 62,000 12,000 0 1,045,000 0 578,000 0 0 0 40,000 418,000 0 4,227,000 0 30,000 0 6,928,000 0 33,231,000
13.3 6.6 17.7 9.9 11.5 8.0 4.2 14.6 17.4 16.2 13.5 15.1 20.7 15.1 16.4 10.7 11.5 24.3 16.2 11.0 13.0 14.8 10.9 21.5 10.3 14.0 15.0 7.8 12.7 14.5 18.6 17.2 17.5 10.2 12.4 13.1 11.0 15.2 10.1 14.6 19.3 7.6 8.8 21.8 7.7 15.1 13.2 20.5 9.3 21.3 18.2 14.1 8.3 18.1 12.93
VACANCY RATE (%) JUNE 30, 2009 14.2 7.8 19.0 10.6 12.8 9.4 6.7 15.2 17.4 16.3 14.7 15.3 21.2 14.4 16.5 10.5 11.5 24.1 18.8 10.9 13.1 15.5 10.9 22.0 10.7 11.4 14.8 8.2 13.2 15.7 19.1 17.8 19.1 10.6 13.7 13.8 12.3 15.9 10.6 16.8 19.9 7.9 10.8 21.8 9.2 15.0 14.1 24.4 11.3 21.5 18.8 14.6 9.6 17.2 13.77
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
(26,000) (29,000) (251,000) (25,000) (581,000) (29,000) (97,000) (824,000) 0 (51,000) (77,000) (82,000) (148,000) (22,000) (83,000) 7,000 3,000 (6,000) (256,000) (39,000) (61,000) (83,000) 0 (68,000) (13,000) 107,000 127,000 83,000 (43,000) (198,000) (47,000) (242,000) (120,000) (346,000) (3,174,000) (747,000) (93,000) (75,000) (241,000) (418,000) (959,000) (75,000) (34,000) 8,000 113,000 15,000 (689,000) (20,000) (679,000) (24,000) (24,000) (52,000) (231,000) 86,000 (10,828,000)
28,000 (38,000) (53,000) (39,000) (1,160,000) (57,000) (301,000) (2,018,000) (3,000) (126,000) (122,000) (118,000) (12,000) (289,000) (140,000) 35,000 (11,000) (6,000) (461,000) (89,000) (229,000) (66,000) (13,000) (61,000) (96,000) 131,000 44,000 51,000 (93,000) (247,000) (239,000) (240,000) (170,000) (348,000) (6,771,000) (2,394,000) (140,000) (204,000) (545,000) (579,000) (1,790,000) (162,000) (60,000) (3,000) 219,000 36,000 (1,242,000) (184,000) (1,326,000) 10,000 (57,000) (116,000) (57,000) 69,000 (21,253,000)
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia, SC Columbus, OH Dallas/Fort Worth, TX Denver, CO Detroit, MI Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC West Palm Beach/Palm Beach County, FL USA TOTAL/AVERAGE
DOWNTOWN OFFICE
EXISTING VACANCY VACANCY INVENTORY (SF) RATE (%) RATE (%) JUNE 30, 2009 MARCH 31, 2009 JUNE 30, 2009 30,963,000 670,000 9,236,000 2,038,000 39,558,000 1,031,000 13,350,000 71,075,000 5,869,000 8,932,000 1,896,000 4,308,000 22,524,000 17,342,000 11,619,000 1,039,000 4,504,000 1,838,000 6,337,000 4,700,000 27,838,000 6,504,000 6,602,000 6,115,000 700,000 2,384,000 14,789,000 2,997,000 1,901,000 7,941,000 5,319,000 13,240,000 3,943,000 55,574,000 162,881,000 14,176,000 10,198,000 5,681,000 30,860,000 9,550,000 13,039,000 14,629,000 2,732,000 548,000 8,653,000 6,977,000 49,687,000 3,365,000 28,967,000 6,843,000 8,476,000 5,642,000 74,506,000 3,002,000 875,089,000
17.3 5.0 16.5 4.6 10.0 5.9 3.4 14.1 14.3 13.5 9.5 13.8 21.6 14.6 13.5 12.5 16.7 17.7 15.5 11.3 8.5 17.8 13.3 17.8 10.5 7.8 13.5 8.8 23.7 11.0 12.0 12.5 18.0 7.5 12.1 7.8 7.1 18.1 9.6 13.4 18.6 5.9 7.2 16.7 5.6 16.3 12.1 25.1 10.8 21.1 18.1 14.5 8.9 23.4 12.09
18.4 7.7 16.4 5.5 12.3 6.4 6.3 15.3 14.5 13.2 13.7 13.3 21.9 14.1 13.0 12.8 17.6 20.3 19.5 11.5 8.4 19.0 13.3 18.6 10.5 10.3 12.1 9.5 23.7 12.6 12.8 13.6 20.4 7.8 13.4 7.9 9.7 18.6 10.2 16.2 18.9 6.1 9.8 16.4 9.7 15.6 12.7 32.8 14.1 21.5 18.8 15.4 8.4 22.0 12.99
CLASS A
AVERAGE ANNUAL YTD ABSORPTION ABSORPTION QUOTED RENT QUARTERLY CHANGE Q2 2009 YTD 2009 (US$ PSF) CHANGE IN IN RENT (SF) (SF) JUNE 30, 2009 RENT (%) (%) 111,000 (16,000) 16,000 (18,000) (347,000) (5,000) (20,000) (849,000) (9,000) 26,000 (80,000) (44,000) (67,000) (70,000) 4,000 (4,000) (42,000) (57,000) (256,000) (9,000) 13,000 (79,000) 0 (45,000) 0 (58,000) 80,000 106,000 0 (122,000) (41,000) (145,000) (92,000) (118,000) (2,109,000) (19,000) (142,000) (29,000) (193,000) (251,000) (402,000) (4,000) (18,000) 1,000 57,000 54,000 (307,000) (18,000) (443,000) (22,000) (24,000) (53,000) 364,000 41,000 (5,752,000)
138,000 (17,000) (71,000) (16,000) (740,000) 0 (177,000) (1,021,000) (13,000) (41,000) (105,000) (49,000) 85,000 (299,000) (22,000) (6,000) 42,000 (57,000) (461,000) (27,000) (118,000) (97,000) 73,000 (69,000) 0 97,000 90,000 102,000 (62,000) (212,000) (11,000) (103,000) (123,000) (39,000) (3,963,000) (300,000) (177,000) (84,000) (507,000) (311,000) (897,000) (7,000) (23,000) (10,000) 150,000 54,000 (706,000) (123,000) (847,000) 12,000 (85,000) (105,000) 122,000 44,000 (10,326,000)
21.90 (3.18) 17.40 0.00 25.00 (0.52) 20.50 (0.97) 50.10 (4.52) 29.00 (3.33) 30.30 (1.30) 35.50 (4.05) 23.50 0.00 21.00 1.85 19.80 (3.18) 23.10 0.39 25.50 (0.97) 28.00 (12.50) 22.60 0.58 25.20 (2.33) 32.00 (0.03) 21.50 (1.73) 23.50 (1.35) 36.50 (2.90) 38.80 (0.23) 20.30 0.00 21.00 0.00 20.20 (0.15) 39.30 0.00 16.40 0.00 39.80 1.84 21.10 1.89 16.90 0.12 43.50 1.83 22.00 0.00 26.50 (4.71) 22.30 (3.00) 48.60 (2.11) 69.70 (6.91) 51.30 (1.99) 34.20 25.55 27.70 (0.75) 25.70 (0.08) 28.80 (5.30) 27.10 (0.88) 25.10 (0.91) 22.70 (2.16) 22.20 (3.14) 34.20 (0.35) 33.50 (1.06) 34.20 (13.40) 37.60 (6.85) 32.10 (6.93) 20.60 0.00 19.60 (2.98) 21.20 (9.23) 49.60 (1.17) 38.40 (3.37) 41.10 (weighted) (5.10) 29.30 (equal) (2.02)
(4.49) 0.00 3.77 2.91 (19.15) 3.57 (5.78) (8.97) (0.34) 5.54 (3.18) 1.05 (1.92) (17.65) 1.30 (4.55) (1.84) (1.73) (1.35) (2.54) 0.96 (1.51) 0.00 0.80 0.00 3.81 6.07 (1.68) (0.06) (1.43) 0.00 (2.28) 8.10 (14.03) (15.17) (13.62) 0.71 (2.30) 0.23 (7.58) (0.88) (1.10) (1.52) (3.14) 0.00 (2.79) (20.63) (7.94) (0.22) 0.00 (5.23) (5.64) (1.08) (4.41) (10.29) (4.36)
COLLIERS INTERNATIONAL
3
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia, SC Columbus, OH Dallas/Fort Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Tampa, FL Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
4
SUBURBAN OFFICE
ALL INVENTORY
EXISTING NEW UNDER VACANCY INVENTORY (SF) SUPPLY CONSTRUCTION RATE (%) JUNE 30, 2009 Q2 2009 (SF) (SF) MARCH 31, 2009 182,350,000 5,923,000 49,265,000 10,221,000 100,555,000 7,986,000 54,699,000 105,710,000 19,422,000 72,489,000 4,886,000 16,589,000 255,685,000 125,453,000 99,291,000 3,593,000 17,698,000 45,366,000 4,433,000 14,322,000 7,642,000 155,815,000 19,879,000 26,339,000 35,938,000 37,610,000 9,739,000 22,913,000 165,777,000 9,221,000 27,409,000 61,693,000 17,809,000 44,146,000 25,107,000 104,024,000 159,001,000 57,371,000 44,229,000 15,877,000 77,207,000 52,278,000 109,064,000 107,493,000 17,837,000 43,289,000 41,071,000 5,399,000 68,900,000 66,855,000 33,478,000 52,671,000 83,673,000 38,754,000 70,959,000 150,397,000 74,101,000 28,677,000 3,365,576,000
COLLIERS INTERNATIONAL
344,000 13,000 654,000 0 427,000 83,000 38,000 0 145,000 35,000 70,000 350,000 561,000 232,000 0 22,000 106,000 95,000 0 0 0 1,293,000 0 0 224,000 143,000 0 0 1,206,000 0 7,000 289,000 0 0 300,000 59,000 283,000 0 0 0 0 459,000 215,000 0 0 327,000 345,000 0 579,000 330,000 161,000 102,000 993,000 391,000 250,000 0 347,000 135,000 11,612,000
2,507,000 48,000 380,000 318,000 544,000 0 249,000 390,000 737,000 223,000 0 337,000 3,210,000 0 197,000 0 11,000 326,000 0 0 0 2,509,000 301,000 0 521,000 324,000 67,000 455,000 1,667,000 0 152,000 1,493,000 0 430,000 84,000 463,000 158,000 975,000 0 0 81,000 815,000 1,261,000 1,348,000 0 61,000 766,000 0 737,000 742,000 0 1,736,000 816,000 1,164,000 267,000 1,542,000 1,245,000 81,000 31,736,000
15.9 10.6 18.2 17.3 17.0 20.0 14.7 21.8 22.6 9.9 17.8 14.7 16.3 2.7 18.7 25.3 13.8 12.9 20.7 19.2 7.8 15.2 21.7 16.0 16.3 23.6 8.1 23.3 17.2 16.6 13.6 12.6 16.4 19.7 11.5 15.3 11.2 17.6 16.9 17.0 19.5 14.7 15.1 20.6 14.4 10.9 19.0 20.9 16.8 18.1 18.4 16.8 10.7 9.5 14.0 10.0 11.5 20.0 15.25
VACANCY RATE (%) JUNE 30, 2009 16.4 10.6 18.4 19.8 19.3 21.5 14.9 23.0 23.0 10.5 22.0 15.5 16.6 14.3 18.4 26.0 13.8 13.8 22.5 18.3 9.3 16.2 22.5 16.0 17.0 24.8 9.4 23.5 15.5 16.8 13.5 14.1 16.5 20.1 13.0 17.2 11.2 18.5 16.4 17.2 20.2 15.8 15.8 22.2 14.9 11.8 21.0 21.0 17.4 18.3 19.9 19.2 11.1 9.3 14.8 10.6 11.6 21.0 16.27
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
(567,000) 62,000 459,000 (255,000) (949,000) (52,000) (105,000) (1,285,000) (61,000) (193,000) (214,000) (75,000) (378,000) 187,000 4,000 (30,000) 92,000 (335,000) (80,000) 131,000 (44,000) (447,000) (164,000) 0 (84,000) (285,000) (107,000) (55,000) (1,077,000) (11,000) 18,000 (768,000) (28,000) (335,000) (113,000) (1,984,000) 206,000 (497,000) 227,000 (10,000) (613,000) (412,000) (547,000) (630,000) (894,000) (90,000) (456,000) (5,000) 19,000 70,000 (408,000) (1,539,000) 387,000 52,000 (652,000) 665,000 148,000 (202,000) (14,305,000)
(935,000) 125,000 (158,000) (348,000) (1,733,000) 46,000 (272,000) (2,158,000) (61,000) (453,000) (214,000) (56,000) 83,000 (371,000) (403,000) (59,000) 29,000 (601,000) (80,000) 2,000 (82,000) (609,000) (239,000) (414,000) (241,000) (555,000) 21,000 (209,000) (3,747,000) 8,000 (6,000) (1,069,000) (17,000) (563,000) (406,000) (1,756,000) 459,000 (1,177,000) (197,000) (70,000) (1,734,000) (640,000) (162,000) (967,000) (1,692,000) (361,000) (827,000) (112,000) (260,000) (173,000) (1,010,000) (2,362,000) 1,007,000 284,000 (1,158,000) 143,000 (276,000) (407,000) (29,188,000)
UNITED STATES OF AMERICA
SUBURBAN OFFICE
MARKET
EXISTING VACANCY VACANCY INVENTORY (SF) RATE (%) RATE (%) JUNE 30, 2009 MARCH 31, 2009 JUNE 30, 2009
Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia, SC Columbus, OH Dallas/Fort Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale/Broward County, FL Greenville, SC Hartford, CT Houston, TX Indianapolis, IN Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Tampa, FL Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA TOTAL/AVERAGE
77,330,000 2,661,000 21,151,000 4,343,000 29,007,000 3,941,000 18,721,000 44,680,000 12,187,000 12,647,000 996,000 8,980,000 94,236,000 37,396,000 27,552,000 2,157,000 3,764,000 10,770,000 1,812,000 8,136,000 65,967,000 10,005,000 9,410,000 11,068,000 4,895,000 2,945,000 4,936,000 99,024,000 5,388,000 6,918,000 14,253,000 6,225,000 16,730,000 15,808,000 61,439,000 90,175,000 31,271,000 25,108,000 3,582,000 32,256,000 15,456,000 67,050,000 32,975,000 9,802,000 12,394,000 24,969,000 2,916,000 15,165,000 23,653,000 21,757,000 24,882,000 23,644,000 24,045,000 24,141,000 98,511,000 38,733,000 8,868,000 1,408,827,000
16.0 7.2 20.7 18.5 18.2 16.4 20.7 28.8 20.4 10.3 13.5 9.4 15.9 16.5 16.6 27.4 24.1 17.5 14.2 17.5 14.3 22.3 17.1 15.7 34.6 5.6 33.3 13.7 16.1 7.7 17.5 10.5 14.7 10.7 14.9 14.0 20.0 19.3 35.0 21.4 16.5 14.1 25.5 12.0 9.6 16.8 23.7 22.8 23.4 17.9 18.5 9.0 7.8 15.9 13.3 14.9 18.0 16.42
16.2 6.8 20.6 20.3 18.8 17.8 20.4 30.5 21.1 11.0 18.4 9.5 16.4 13.9 16.9 27.8 21.8 18.5 14.2 17.7 16.0 22.6 17.1 16.9 38.6 4.6 37.2 15.0 16.2 8.0 18.8 14.1 16.7 12.6 18.0 13.9 20.8 19.2 43.7 22.5 16.8 14.9 26.3 12.6 11.4 18.8 22.0 23.0 23.0 19.9 22.3 9.7 7.4 17.4 13.6 16.0 19.9 17.26
CLASS A
AVERAGE ANNUAL YTD ABSORPTION ABSORPTION QUOTED RENT QUARTERLY CHANGE Q2 2009 YTD 2009 (US$ PSF) CHANGE IN IN RENT (SF) (SF) JUNE 30, 2009 RENT (%) (%) 101,000 11,000 555,000 (78,000) 175,000 0 (52,000) (753,000) 59,000 (77,000) (54,000) 8,000 (126,000) 201,000 (157,000) (7,000) 87,000 (34,000) 0 (5,000) (147,000) (50,000) 0 (35,000) (55,000) 25,000 (3,000) (530,000) (4,000) (23,000) 8,000 (224,000) (147,000) (64,000) (1,912,000) 341,000 (273,000) 23,000 (139,000) (348,000) 55,000 (332,000) (119,000) (22,000) 8,000 (307,000) 48,000 351,000 312,000 (319,000) (907,000) 585,000 92,000 (400,000) 665,000 (200,000) (72,000) (4,263,000)
105,000 78,000 214,000 (112,000) (162,000) 127,000 (183,000) (1,276,000) 22,000 (28,000) (54,000) 11,000 164,000 162,000 (327,000) (27,000) 81,000 (107,000) 0 (133,000) 483,000 (131,000) (480,000) (41,000) (111,000) 135,000 (64,000) (2,048,000) 37,000 (81,000) (139,000) (139,000) (393,000) (233,000) (1,493,000) 877,000 (735,000) (236,000) (164,000) (761,000) (220,000) 91,000 12,000 17,000 (102,000) (275,000) (19,000) 263,000 309,000 (659,000) (1,261,000) 1,032,000 275,000 (610,000) 1,018,000 (315,000) 202,000 (7,919,000)
22.40 (1.58) 24.00 0.00 26.40 1.46 18.30 0.00 30.10 (0.33) 26.50 0.00 19.90 (0.60) 27.80 (0.68) 21.10 0.19 21.20 0.43 18.00 1.47 19.50 0.88 25.50 (0.97) 22.00 (10.20) 23.30 (1.61) 25.30 0.00 25.80 (2.27) 28.00 0.14 18.60 (1.06) 21.00 (0.29) 27.60 (0.93) 19.50 0.00 21.00 0.00 22.30 (2.07) 35.50 (1.96) 18.30 0.00 27.40 (2.15) 36.10 (2.67) 17.60 0.28 21.70 (0.32) 33.10 (2.62) 21.00 0.00 27.50 (0.90) 21.70 (1.23) 26.40 0.80 28.40 (0.98) 31.80 (5.91) 27.00 (4.09) 31.80 12.77 31.20 (3.29) 23.60 (0.25) 25.00 0.48 26.80 (3.52) 23.20 (3.50) 23.70 (2.71) 22.20 0.05 21.60 (5.26) 25.80 (2.71) 36.40 (1.94) 34.80 (3.33) 38.30 (5.34) 28.00 3.55 25.00 0.00 25.10 1.01 29.70 (0.20) 30.20 1.75 31.00 (1.56) 27.40 (weighted) (1.16) 25.60 (equal) (1.09)
(3.11) 0.00 1.15 (3.43) (6.17) 26.19 (0.50) 15.88 3.07 0.76 1.47 0.41 (1.92) (12.00) (2.06) (0.47) (4.44) (10.77) 0.00 (0.43) (1.04) 1.40 0.00 (1.81) (3.45) 0.00 (4.20) (5.05) (9.40) 1.40 (4.58) (30.81) (1.54) (3.30) (2.69) (2.20) 1.27 (5.10) (0.31) (11.86) (2.03) (0.44) (9.42) (4.46) (3.78) (0.76) (5.26) 2.38 (5.02) (11.31) (7.80) 39.72 (3.85) 3.30 7.41 (0.75) (5.66) (2.56) (2.32)
COLLIERS INTERNATIONAL
5
CANADA
DOWNTOWN AND SUBURBAN OFFICE
ALL INVENTORY AND CLASS A
DOWNTOWN OFFICE – ALL INVENTORY
MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC Victoria, BC CANADA TOTAL/AVERAGE
34,211,000 10,613,000 4,891,000 1,786,000 49,429,000 14,606,000 3,733,000 1,926,000 84,998,000 24,497,000 4,636,000 235,326,000
NEW SUPPLY Q2 2009 (SF)
0 461,000 0 0 0 0 0 0 26,000 22,000 (5,000) 504,000
UNDER CONSTRUCTION (SF)
5,454,000 578,000 0 169,000 0 360,000 0 127,000 4,571,000 0 243,000 11,502,000
VACANCY RATE (%) MARCH 31, 2009
6.4 0.5 3.8 10.2 4.8 3.1 1.6 4.6 4.2 3.5 – 4.27
VACANCY RATE (%) JUNE 30, 2009
7.8 5.0 3.8 10.0 6.2 2.9 1.6 4.6 4.7 4.5 2.7 5.26
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
(484,000) 463,000 2,000 3,000 (656,000) 28,000 2,000 (1,000) 86,000 (242,000) (19,000) (818,000)
(1,086,000) 375,000 (33,000) 4,000 (888,000) (83,000) 14,000 3,000 411,000 (534,000) (19,000) (1,835,000)
DOWNTOWN OFFICE – CLASS A
MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC Victoria, BC CANADA TOTAL/AVERAGE
20,750,000 8,275,000 1,916,000 571,000 23,076,000 8,641,000 1,026,000 442,000 37,955,000 10,034,000 596,000 113,283,000
VACANCY RATE (%) MARCH 31, 2009
3.6 3.9 1.4 11.4 4.4 3.0 0.6 0.0 4.7 2.1 – 3.90
VACANCY RATE (%) JUNE 30, 2009
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
3.7 3.8 2.8 11.1 6.3 2.6 0.6 0.0 5.7 3.2 3.8 4.76
(72,000) 5,000 (22,000) 1,000 (452,000) 32,000 0 4,000 (30,000) (107,000) (10,000) (651,000)
(354,000) (68,000) (5,000) 0 (463,000) (82,000) (4,000) 4,000 243,000 (180,000) (10,000) (921,000)
AVG. ANNUAL QUOTED RENT (C$ PSF) JUNE 30, 2009
QUARTERLY CHANGE IN RENT (%)
48.00 (14.29) 46.80 (1.91) 31.50 2.18 27.30 0.00 31.10 6.69 48.50 0.00 34.80 0.00 30.00 4.35 53.60 1.29 44.00 0.00 37.00 0.00 45.40 (weighted) (2.19) 39.30 (equal) (1.00)
YTD CHANGE IN RENT (%)
(13.51) 2.77 2.88 12.73 (3.98) 5.30 (0.37) (7.22) 0.00 0.00 (3.46) (4.47)
SUBURBAN OFFICE – ALL INVENTORY
MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montreal, QC Ottawa, ON Regina, SK Toronto, ON Vancouver, BC Victoria, BC CANADA TOTAL/AVERAGE
16,717,000 8,192,000 5,864,000 2,393,000 22,422,000 19,885,000 533,000 95,667,000 27,892,000 3,377,000 202,942,000
NEW SUPPLY Q2 2009 (SF)
390,000 76,000 (20,000) 0 0 0 0 496,000 0 28,000 969,000
UNDER CONSTRUCTION (SF)
1,005,000 173,000 150,000 73,000 0 0 0 1,594,000 870,000 150,000 4,014,000
VACANCY RATE (%) MARCH 31, 2009
9.2 3.1 14.7 7.7 9.7 9.3 1.4 5.8 7.6 – 7.18
VACANCY RATE (%) JUNE 30, 2009
11.0 10.4 14.6 7.5 9.1 9.7 1.4 6.7 8.1 0.8 8.08
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
117,000 (5,000) 21,000 5,000 133,000 (92,000) 0 572,000 (147,000) (5,000) 597,000
40,000 21,000 145,000 128,000 280,000 (26,000) 16,000 64,000 (274,000) (5,000) 389,000
SUBURBAN OFFICE – CLASS A
MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
Calgary, AB Edmonton, AB Halifax, NS Kitchener-Waterloo, ON Montreal, QC Ottawa, ON Regina, SK Toronto, ON Vancouver, BC Victoria, BC CANADA TOTAL/AVERAGE
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7,559,000 4,176,000 2,430,000 993,000 12,027,000 11,645,000 533,000 43,734,000 12,649,000 682,000 96,430,000
VACANCY RATE (%) MARCH 31, 2009
9.1 6.7 23.7 10.5 8.4 10.3 1.4 6.9 10.5 – 8.49
VACANCY RATE (%) JUNE 30, 2009
ABSORPTION Q2 2009 (SF)
ABSORPTION YTD 2009 (SF)
10.3 8.5 19.6 9.4 8.2 11.6 1.4 7.0 11.1 2.8 8.86
265,000 (26,000) 15,000 11,000 21,000 (150,000) 0 683,000 (86,000) (8,000) 724,000
410,000 (26,000) 104,000 107,000 140,000 (200,000) 16,000 741,000 (166,000) (8,000) 1,118,000
AVG. ANNUAL QUOTED RENT (C$ PSF) JUNE 30, 2009
QUARTERLY CHANGE IN RENT (%)
34.80 (0.14) 31.30 (0.06) 27.20 0.15 25.50 0.00 24.90 0.61 30.00 0.10 28.00 0.00 29.80 (0.13) 31.00 (3.13) 33.00 0.00 29.70 (weighted) (0.98) 29.50 (equal) (0.30)
YTD CHANGE IN RENT (%)
(7.33) (2.13) 2.91 (5.20) (9.83) (7.57) 0.00 (0.87) 0.00 0.00 (3.49) (3.11)
NORTH AMERICA
OFFICE INVESTMENT
Office Space Markets Post Another Weak Quarter
UNITED STATES OF AMERICA – OFFICE INVESTMENT
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Boston, MA Charleston, SC Charlotte, NC Chicago, IL Cleveland, OH Columbus, OH Dallas/Fort Worth, TX Denver, CO Fresno, CA Ft. Lauderdale/Broward County, FL Houston, TX Jacksonville, FL Kansas City MO-KS Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Miami/Dade County, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New Jersey - Central New Jersey - Northern New York - Fairfield County, CT New York - Westchester County, NY New York, NY - Downtown Manhattan New York, NY - Midtown Manhattan New York, NY - Midtown S. Manhattan Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh/Durham/Chapel Hill, NC Reno, NV Sacramento, CA San Diego County, CA San Francisco, CA San Jose/Silicon Valley, CA St. Louis, MO Stockton/San Joaquin County, CA Tampa, FL Washington, DC Washington, DC - N.Virginia Washington, DC - Suburban, MD West Palm Beach/Palm Beach Co., FL USA AVERAGE
CBD SALES PRICE (US$ PSF) 180.00 – 200.00 151.00 470.00 250.00 275.00 161.00 115.00 – – 195.00 185.00 – 140.00 115.00 245.00 – 79.00 – 292.00 165.00 225.00 165.00 177.00 – – – – 200.00 350.00 300.00 250.00 – 180.00 130.00 – 314.00 98.00 – 150.00 250.00 – 265.00 – – 150.00 150.00 351.00 395.00 395.00 103.00 217.11
CBD SUBURBAN SUBURBAN CAP RATE SALES PRICE CAP RATE (%) (US$ PSF) (%) 7.40 – 8.50 7.60 – 8.50 8.00 7.50 10.00 – – 9.25 8.50 – 8.00 9.00 9.00 – 9.00 – 4.90 – 8.00 8.50 8.25 – – – – 8.00 7.00 8.00 8.00 – 8.50 8.90 – 9.10 – 9.00 8.00 – 7.50 – – 8.80 8.50 6.95 7.15 7.15 9.40 8.18
135.00 235.00 175.00 151.00 95.00 150.00 120.00 112.00 115.00 158.00 130.00 125.00 203.00 147.00 89.00 135.00 120.00 295.00 128.00 134.00 287.00 155.00 180.00 150.00 97.00 165.00 170.00 250.00 200.00 – – – 200.00 276.00 170.00 131.00 93.00 299.00 158.98 120.00 205.00 204.00 128.00 – 151.00 100.00 – 150.00 – 305.00 241.00 184.00 167.87
8.10 – 9.00 7.60 – 10.00 9.00 8.20 9.50 – 9.00 9.50 8.00 – 9.00 9.00 10.00 7.80 9.00 7.10 6.10 7.75 8.00 8.50 7.25 8.50 8.00 8.00 8.00 – – – 8.00 6.50 9.50 8.90 8.95 6.50 7.50 9.75 8.25 7.50 – – – 10.50 – 9.00 – 8.10 7.90 7.50 8.36
Continued from page 1
Rents (CBD) register third substantial drop. For the third consecutive quarter, downtown lease rates dropped significantly with Q2 Class A asking rents dipping by 5.1% to $41.15 per square foot. Markets such as Manhattan, Boston, Chicago and San Francisco again contributed to the unusually large drop but nonetheless the national trend is clearly down as demonstrated by unweighted rental declines (see unweighted rent on page 3). Suburban asking rents also fell during the quarter, declining by 1.2% to $27.37 per square foot. Year-to-date CBD rents are down 10.3% while suburban rents are down 2.6%. Office rents in Canada also fell with CBD rents declining 2.2% while suburban rents moved 1.0% lower. Office construction up for the quarter but the trend remains down. Second quarter office completions totaled 16.3 MSF, a slight increase from the 15.4 MSF recorded in the first quarter, but a modest decline from the second quarter of 2008 when construction registered 19.4 MSF. Construction activity continued to decline with Q2 under construction activity falling by 18.8 MSF to total 65 MSF. Construction activity is expected to maintain this trend, leaving the development pipeline below levels witnessed in early 2005, when just 40 MSF of office development was underway.
CANADA – OFFICE INVESTMENT
MARKET Calgary, AB KitchenerWaterloo, ON Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto, ON Vancouver, BC Victoria, BC CANADA AVERAGE
CBD CBD SUBURBAN SUBURBAN SALES PRICE CAP RATE SALES PRICE CAP RATE (C$ PSF) (%) (C$ PSF) (%) 385.00 7.50 275.00 8.00 160.00 275.00 – 139.00 175.00 341.00 500.00 325.00
8.00 7.50 8.00 7.70 8.50 7.00 5.75 6.50
110.00 175.00 130.00 – – 201.00 300.00 290.00
7.75 8.25 8.40 – – 7.80 7.50 6.75
287.50
7.38
211.57
7.78
GLOSSARY Inventory – Includes all existing multi- or single-tenant leased and owneroccupied office properties greater than or equal to 10,000 square feet (net rentable area). In some larger markets this minimum size threshold may vary up to 50,000 square feet. Does not include medical or government buildings. Vacancy Rate – Percentage of total inventory physically vacant as at the survey date including direct vacant and sublease space. Absorption –Net change in physically occupied space over a given period of time. New Supply – Includes completed speculative and build-to-suit construction. New supply quoted on a net basis after any demolitions or conversions. Annual Quoted Rent – Includes all costs associated with occupying a full floor in the mid-rise portion of a Class A building inclusive of taxes, insurance, maintenance, janitorial and utilities (electricity surcharges added where applicable). All office rents in this report are quoted on an annual, gross per square foot basis. Rent calculations do not include sublease space. Cap Rate – (Or going-in cap rate) Capitalization rates in this survey are based on multi-tenant institutional grade buildings fully leased at market rents. Cap rates are calculated by dividing net operating income (NOI) by purchase price. Note: SF = Square Feet; PSF = Per Square Foot; CBD = Central Business District
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
COLLIERS INTERNATIONAL
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HIGHLIGHTS · NORTH AMERICA
Colliers International is an affiliation of leading real estate firms committed to delivering consistently superior commercial real estate services, wherever and whenever needed.
OFFICE · SECOND QUARTER 2009
$1.6 Billion (€1.1 Billion) in Global Revenue 1. 1 Billion SF (102 Million SM) Under Management 12,700 Employees
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